Summaries of health policy coverage from major news organizations

UnitedHealth Plan To Boost Dividends May Draw Criticism

The Associated Press: UnitedHealth Group has drastically raised dividends paid to shareholders - from $35 million to $560 million a year - in a move that may draw criticism for profits that rose alongside soaring health costs. "There is somewhat of a risk, especially in the current fragile reform environment, that says, 'Why is UnitedHealth declaring a dividend instead of lowering health care costs for its members?'" said analyst Tom Carroll. The insurer, the biggest in terms of revenue, had earlier said it may raise its dividends after determining the financial impact of the health overhaul (Murphy, 5/26).

Bloomberg Businessweek: Still, "UnitedHealth shares have lost 13 percent of their value since March 30, the day President Barack Obama signed legislation increasing taxes and regulations on insurers while expanding coverage of the uninsured." Another analyst, Brian Wright, said, "What they're trying to do is send a signal to the market that even under the most adverse scenarios one can draw up, we're still comfortable in our future," in an effort to draw more investors (Nussbaum, 5/26).

Reuters: "The company's board approved a quarterly dividend of 12.5 cents per share to be paid on June 21 to shareholders of record as of June 7, UnitedHealth said on Wednesday." The payment will set a new record, breaking the 3-cent per share annual dividend benchmark set in April. The quarterly dividends will add up to 50 cents per share annually. The news sent stock prices up about 2 percent on Wednesday (Krauskopf, 5/26).

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